Stopping Referral Leakage with Telemedicine

By Joel Barthelemy, Founder, Chief Executive and Operating Officer, GlobalMed
Twitter: @GlobalMed_USA

Sooner or later, ROI comes up in every telemedicine conversation. Some providers have begun to realize that virtual health can drive revenue and reimbursement. Increased patient volume, eliminated air transport, after-hour appointments and reduced no-shows can all reduce costs or add additional provider income.

But there’s one virtual care benefit that doesn’t get the spotlight quite as much: stopping referral and patient leakage. By dissolving typical referral challenges, telemedicine can prevent financial loss – like when patients walk out the door to another health system and take with them potential reimbursement.

Revenue and Reimbursement Loss
Hospital networks and large healthcare systems are most affected by patient leakage. Managed care organizations like Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs) typically require patients to see providers in their network. When patients decide to see a primary care provider or specialist who is out of network or operating in a different hospital system, several repercussions happen:

  • Clinicians and hospitals lose the reimbursement for medical services that are provided elsewhere.
  • Systems like accountable care organizations (ACOs) that use value-based care or payment models can no longer manage the cost or quality of the patient’s care.
  • Providers miss the opportunity to collaborate and coordinate care with the patient’s other providers, which disrupts clinical alignment.
  • The likelihood increases that patients will find other doctors they like in the new health system and terminate their former care relationships.

Often this kind of loss isn’t tracked by the hospital network or healthcare system. Yet even a moderately sized clinic can lose a significant amount of revenue. If even four patients decamp in a week, each representing $2,500 in revenue, that’s $10,000 a week in revenue that’s lost.

Why Does Referral Leakage Happen?

Sometimes a patient referred to a specialist sees that his office is in another town and decides to find her own specialist with a closer office or better hours. Direct-To-Consumer telehealth vendors and retail clinics can also siphon off patients from their standard providers.

Provider reputation.
While a primary care provider (PCP) may refer her patient to a specialist she considers skilled, the patient may Google the specialist and see negative reviews. Or he may ask his friends for a recommendation. Hospital brands like the Mayo Clinic, industry recognition or even an authored paper found online can all convince patients to go out of network.

Lack of options.
Sometimes the patient requires medical or behavioral services that aren’t locally available in that hospital system or network. Often patients will choose to find an alternative rather than travel long distances to complete a referral.

Referral challenges.
Referrals are documented in a variety of ways, from handwritten notes to online repositories to faxes. Following the referral steps in an EHR system can involve multiple people, increasing the odds that it falls through the cracks. Only 16 percent of Medicaid patients referred to a specialist end up seeing one – and many opt to find their own providers.

The ROI on Downstream Referrals
Right out of the gate, virtual health solves a major stumbling block: provider location. By removing that factor, it’s easy for providers to refer within their network or healthcare system – and spark patient use of other services.

One way to do this: provide specialist options. To keep your patients in network, provide more than one choice for an in-network specialist. Find out patient preferences and see how you can accommodate them.

Another option is holding the specialty consult while the patient is in your office. Instead of writing a referral and making the patient wait for a second appointment, arrange with a specialist to remotely join the visit through your telemedicine screen. In addition to faster treatment for the patient, there’s no danger of them going out of network.

This increase in downstream referrals will show immediate financial returns. Imagine that in one day, your hospital network is able to use telemedicine for these referrals:

  • 3 emergency room visits: $1200/visit = $3,600
  • 10 primary care referrals: $150/visit =$1,500
  • 12 referrals for lab testing: $200/visit =$2,400
  • 9 referrals for radiology services: $800/visit = $7,200

The total referral revenue for that day: $14,700

Bear in mind that this only works with a provider-agnostic telemedicine solution that can be used by any provider. A DTC telehealth app will once again reroute the patient outside of your network to an unfamiliar provider. But with the right virtual health solution, your network or practice can keep more revenue, increase patient retention and strengthen quality of care.

This article was originally published on GlobalMed and is republished here with permission.